Supply Chain Bottlenecks Pose Concern in Pork Markets

Pork is seeing massive shifts from food service towards retail, said Glynn Tonsor, an ag economist at Kansas State University on AgManager.info.

As consumers buy more perishable food to comply with orders to stay at home, there's going to be less and less activity through restaurants, he noted.

“That probably is going to lead over into a massive shift,” Tonsor explained. “The net impact is to be determined, but possibly we're going to see some near-term support from a supply perspective.”

From an availability standpoint, the latest cold storage stocks are well above the year prior. With pork production running high in the U.S., there’s a lot of pork out there putting downward pressure on the markets.

“That gives us some assurance for availability for consumers, which is good to note,” he said.

Going forward, Tonsor said the biggest supply challenge will be a potential labor challenge. If plants have to shut down due to worker health concerns, can production, processing and transportation of pork and pork products continue as normal?

That's where the risk on the supply side holds, he added.

“Hopefully we're able to keep the supply chain operating as normal. But those bottlenecks, or pinch points – how we go from a live animal to that wide array of pork products – that's the concern on the supply side that’s been weighing downs markets for the past two weeks,” he said.